Live Face On Web, LLC v. Integrity Solutions Group, Inc.

          ORDER DENYING A STAY OF EXECUTION OF JUDGMENT

          CHRISTINE M. ARGU LLO UNITED STATES DISTRICT JUDGE

         This matter is before the Court on Defendant Integrity Solutions Group, Inc.'s Second Renewed Motion to Stay Execution of Judgment. (Doc. # 272.) The Court denies Defendant's Motion for the reasons detailed below.

         I. BACKGROUND

         United States Magistrate Judge Scott T. Varholak detailed the factual background of this matter in his Recommendation on the Motion to Dismiss, issued March 14, 2017. (Doc. # 61.) The Recommendation is incorporated herein by reference. See 28 U.S.C. § 636(b)(1)(A); Fed.R.Civ.P. 72(a). The Court will detail only the subsequent procedural history relevant to the Motion now before it.

         As the Court explained in its Order Denying Defendant's First Renewed Motion to Stay Execution of Judgment (Doc. # 256), a four-day jury trial on Plaintiff Live Face on Web, LLC's copyright infringement claim resulted in the jury awarding Plaintiff $262, 197.00 in actual damages. See (Doc. # 216.) On October 5, 2018, the Clerk of the Court entered judgment in that amount, plus post-judgment interest, in Plaintiff's favor (the “Judgment”). (Doc. # 218.)

         On October 22, 2018, Plaintiff began executing the Judgment by applying for and receiving several writs of garnishment directed to Defendant's vendors and customers. (Doc. ## 228-39.) Defendant filed its First Renewed Motion to Stay Execution of Judgment on the following day, October 23, 2018, and requested that the Court stay execution of the Judgment pursuant to Federal Rule of Civil Procedure 62(b) until the Court ruled on Defendant's then-forthcoming post-trial motions. (Doc. # 244.) Defendant stated that it did not have the resources to post a bond. (Id. at 5.) Plaintiff responded in opposition to Plaintiff's request on October 24, 2018 (Doc. # 249), to which Defendant replied on October 29, 2018 (Doc. # 255).

         The Court denied Defendant's First Renewed Motion to Stay Execution of Judgment on October 30, 2018. (Doc. # 256.) It concluded that it could not grant Defendant's request to stay execution of the Judgment because Defendant was unwilling to meet any “appropriate terms for the opposing party's security” as required by Rule 62(b). (Id. at 5-6); Fed.R.Civ.P. 62(b). Having reached that conclusion, the Court declined to address the four factors bearing on whether a stay of execution of judgment is warranted. (Doc. # 256 at 6.)

         Also on October 30, 2018, Plaintiff filed applications for and the Clerk of the Grant issued writs of garnishment directed at Defendant's counsel, the Schneider Rothman IP Law Group and the T. Walsh Law Firm, Ltd. (Doc. ## 257-58, 261-62.) The Schneider Rothman IP Law Group answered on November 13, 2018, stating that it did not possess or control any personal property of Defendant, the judgment debtor, and did not owe any rents, payments, obligations, debts, or money to Defendant. (Doc. # 290.) The T. Walsh Law Firm answered on November 13, 2018 as well, but it stated that it possessed $22, 149.72 in “client retainer funds held in firm's COLTAF account.” (Doc. # 286 at 2.)

         Defendant filed its Second Renewed Motion for Stay of Execution of Judgment on November 2, 2018. (Doc. # 272.) In response to the Court's statement that Rule 62(b) plainly requires the party requesting a stay to post a security, Defendant proffers:

As of the date and time of service of the Writ of Garnishment [to the T. Walsh Law Firm] by Plaintiff, [the T. Walsh Law Firm] holds the sum of $22, 149.72 in its client trust account on behalf of [Defendant.] . . . Defendant requests that [it] be permitted to instruct its counsel to deposit $22, 149.72[, ] to be deposited onto the Court's registry[, ] to serve as a security to support the present Motion.

(Id. at 2.) Defendant also argues that a stay is appropriate under the four relevant factors because: (1) its contemporaneously-filed motions for post-judgment relief, see (Doc. ## 270-71, 284-85), make a strong showing that it is likely to succeed on the merits; (2) Defendant “continues to incur costs and [sic] related to this trial;” (3) the “deposit of these funds into the Court's registry . . . would not substantially injure the Plaintiff;” and (4) the “public interest supports a party such as allowing Integrity [sic] a brief respite from the aggressive post-judgment actions of the Plaintiff in order to put forth its post-judgment motions” and conduct other post-trial work. (Doc. # 272 at 3-4.)

         Plaintiff responded in opposition to Defendant's renewed request for a stay on November 6, 2018. (Doc. # 275.) Plaintiff first argues that Defendant's proposal to deposit the $22, 149.72 sum held by the T. Walsh Law Firm in its client trust account on Defendant's behalf “is no offer of security at all” because those funds “have been properly garnished-frozen-and the Defendant has no right to direct what happens to those funds.” (Id. at 2.) Plaintiff also asserts that Defendant has “not objectively shown it cannot afford to provide [Plaintiff] security in the full amount of judgment.” (Id.) Finally, turning to the four factors bearing on a stay pursuant to Rule 62(b), Plaintiff argues that Defendant fails to make a strong showing that it will prevail in its post-trial motions because Defendant's positions in those motions are “simply a rehash of theories considered and rejected by this Court and the Jury” or “were waived by virtue of a failure to raise them at trial pursuant to Rule 50(a).” (Id. at 5.)

         Defendant filed its Reply on November 10, 2018. (Doc. # 283.) It rebuts each of Plaintiff's arguments, asserting that “the amount pledged functions as a security under Rule 62, ” that Plaintiff “possess[es] objective evidence of Defendant's decline in revenues, ” and that Defendant “meets its burden under the four Rule 62 factors.” (Id. at 2-4.)

         II. APPLICABLE ...